Clarkson PLC (LON:CKN) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Investors in Clarkson PLC (LON:CKN) had a good week, as its shares rose 6.6% to close at UK£34.70 following the release of its yearly results. Results overall were respectable, with statutory earnings of UK£1.63 per share roughly in line with what the analysts had forecast. Revenues of UK£443m came in 4.1% ahead of analyst predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Clarkson

Following the latest results, Clarkson's five analysts are now forecasting revenues of UK£473.7m in 2022. This would be a reasonable 6.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 11% to UK£1.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£437.5m and earnings per share (EPS) of UK£1.49 in 2022. So it seems there's been a definite increase in optimism about Clarkson's future following the latest results, with a great increase in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of UK£43.71, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Clarkson at UK£49.50 per share, while the most bearish prices it at UK£36.55. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Clarkson is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Clarkson's growth to accelerate, with the forecast 6.9% annualised growth to the end of 2022 ranking favourably alongside historical growth of 5.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.4% annually. So it's clear with the acceleration in growth, Clarkson is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Clarkson's earnings potential next year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Clarkson analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Clarkson (1 shouldn't be ignored!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.